Abstract Drought events and nitrogen deposition are substantially modifying the stability of terrestrial ecosystems. Previous studies have mostly investigated these factors separately, with an emphasis on productivity stability, leaving their combined effects on multiple dimensions of ecosystem stability poorly understood. We conducted a four-year grassland manipulative experiment to examine how three drought scenarios—intense drought, chronic drought, and precipitation frequency reduction—interact with nitrogen addition to influence community compositional stability and productivity stability. The results showed that drought and nitrogen enrichment independently influenced grassland stability without significant interactions. Both intense and chronic drought reduced productivity stability, while reduced precipitation frequency decreased compositional stability. Nitrogen addition decreased both types of stability. Productivity stability was driven by the dominant species’ productivity stability or a combination of it and species asynchrony, depending on the drought scenario. Compositional stability consistently depended on the dominant species’ compositional stability. Compositional and productivity stability remained decoupled across treatments. This study provides the first empirical evidence of the divergent responses of grassland compositional and productivity stability to various drought scenarios under nitrogen enrichment. Our findings highlight the importance of prioritizing dominant species and promoting species coexistence with diverse environmental responses to maintain stable grassland composition and productivity under global change.